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When you’re buying a house, everything is simultaneously so exciting, stressful, refreshing, and anxiety-inducing that it can be difficult to step back and assess the situation; this is where unexpected costs begin to sneak up on you.
Without proper forethought and planning, some mandatory (and optional) fees can damage your budget and your wellbeing. But today, Plumlife is ready to shed light on some of the most easily forgotten hidden costs that buyers forget when purchasing a home. So, what costs commonly creep up on homebuyers?
The most forgotten-about and stressful hidden costs when it comes to buying a home include:
Keep reading for a full breakdown on each of these hidden homebuying costs, and to find out what aspect of buying a home worries 79% of buyers the most.
With so many things to consider throughout the process, it can be hard to track when each step happens, which is why this guide focuses on costs that happen before you properly own and move into the home. For your ease, below are listed each of the costs discussed in this blog and their respective price range estimates.
| Cost | Average Estimated Cost | |
| Deposit | 5% – 20%
of the home’s purchase price |
|
| Mortgage Arrangement Fee | £500 – £1,500 | |
| Mortgage Booking Fee | £100 – £300 | |
| Valuation Fee | No charge – £300 | |
| Cost of a Property Survey | £500 – £1,500 | |
| Anti-Money Laundering Checks | No charge – £75 | |
| Broker Fee | No charge – £500+ | |
| Conveyancing Fee | £1,000 – £2,500 | |
| Land Registry Fee | £200 – £300
Depends on property value |
|
| Stamp Duty (SDLT) | Portion of Property Value | Normal Rate SDLT |
| Up to £125,000 | 0% | |
| Portion from
£125,001–£250,000 |
2% | |
| Portion from
£250,001–£925,000 |
5% | |
| Portion from
£925,001–£1.5 million |
10% | |
| Portion above
£1.5 million+ |
12% | |
While not a particularly hidden cost, the deposit for a home is one of the largest upfront hurdles for buyers to jump.
Deposits generally range in value from 5–20% of the home’s purchase price. Sometimes you get to control how much deposit you pay, with larger deposits granting access to better mortgage repayment rates and a wider range of lenders.
Recent research from the HomeOwners Alliance (HOA) found that 79% of first-time buyers in the UK are concerned about saving for a deposit, making it one of the most anxiety-inducing factors of buying a home alongside getting on the housing ladder (81%) and house prices (81%).
To set up your mortgage, some companies will charge an ‘arrangement fee’, which can range from £500 to £1,500.
Some mortgage lenders add this fee to allow them to access the best mortgage rates. You’ll usually have two options for how to pay:
It can sometimes be worth paying a higher arrangement fee to get a lower mortgage rate, but you should speak to a fee-free mortgage broker before to make sure that this is the case.
Some lenders might charge a ‘booking fee’ (or a ‘reservation fee’) for securing a mortgage deal, costing between £100 and £300. However, this is not very common today.
Mortgage booking fees are non-refundable and must be paid up front.
Lenders will hire a surveyor to conduct a mortgage valuation survey to check that the property is worth the amount you have offered to pay for it.
This is so the lender can be assured that they could cover costs on the home by selling it should you default on your mortgage.
Not every lender will charge this fee, but for those who do, the cost can scale according to the property’s value, though typically, mortgage valuation fees cost up to £300.
This cost is similar to the mortgage valuation fee, except it’s not for the benefit of your lender; it’s for your benefit.
A property survey is a thorough inspection of the property to reveal any structural, plumbing, and miscellaneous issues with the building.
You can often use the results of a property survey to renegotiate the price.
Property surveys typically cost between £500 and £1,500, depending on the survey type.
To comply with anti-money laundering regulations, estate agents and solicitors must conduct background checks on homebuyers.
For solicitors, this is usually included within the conveyancing fee. For estate agents, this is typically not charged to the potential buyer (though MoneySavingExpert reports that some estate agents have recently charged as much as £75).
If you have used a mortgage broker, you might have to pay for their services, but not always. Broker fees typically range anywhere from ‘no charge’ to £500+.
Different brokers may charge based on an hourly rate, a flat fee, or a percentage of your mortgage or loan (this option can get expensive). Some brokers can earn a commission from the lender, which can mean that they are willing to reduce their fee or not charge at all.
Conveyancing fees are the total costs for all legal work conducted by your solicitor associated with buying a home, such as:
Different experts provide varying estimates for how much conveyancing fees cost, but the most realistic range is between £1,000 and £2,500.
The Land Registry registers your new home in your name, taking care of transferring the property from its previous owner’s name entry into yours. The cost of this service depends on the value of the home:
You have to pay this fee, which you will do at completion via your solicitor.
Simply put, stamp duty is the tax you pay when buying a property in the UK.
You can use the GOV.UK Stamp Duty calculator to estimate what you might pay on a home you’re considering buying.
The cost of stamp duty varies based on the purchase price of the property and whether you are a first-time buyer. For each band of stamp duty, you pay a percentage for that portion of the property’s cost.
| Property Purchase Price | Normal Stamp Duty Rate |
| Up to £125,000 | 0% |
| The next £125,000
(the portion from £125,001–£250,000) |
2% |
| The next £675,000
(the portion from £250,001–£925,000) |
5% |
| The next £575,000
(the portion from £925,001–£1.5 million) |
10% |
| The remaining amount
(the portion above £1.5 million) |
12% |
Stamp Duty ExampleFor example, if you are not a first-time buyer and you purchase a house for £300,000 with normal rate Stamp Duty, you will be due to pay £5,000 in Stamp Duty, calculated as:
|
If you are a first-time buyer, you can claim relief (a discount), which means you pay:
Looking to buy your next home in the North of England? Plumlife Homes has a wide selection of new-build properties to choose from; we even use schemes like Shared Ownership to help first-time buyers make the leap.
Get in touch online or browse our houses for sale via the buttons below.
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